House Passes Major Overhaul of Labor Law

Allen Smith, J.D. By Allen Smith, J.D. February 6, 2020
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dome of U.S. Capitol

​The U.S. House of Representatives passed a bill Feb. 6 by a vote of 224 to 194 that would change labor law in many ways. Secret-ballot union elections could be more easily bypassed by signing union authorization cards, classifying workers as independent contractors would be more difficult, and an expansive definition of "joint employer" would be revived. These three provisions are just a few of the changes that would result from the passage of the Protecting the Right to Organize (PRO) Act.

The Society for Human Resource Management (SHRM) opposes the bill, which most likely will not pass the Senate. The Trump administration announced Feb. 5 that the president would veto the measure if it came to his desk.

Johnny C. Taylor, Jr., SHRM-SCP, SHRM's president and chief executive officer, and Emily M. Dickens, SHRM's corporate secretary, chief of staff and head of Government Affairs, sent a letter Feb. 5 to House Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif., and copied all members of the House. They wrote that SHRM is concerned with the following effects of PRO Act provisions:

  • The violation of employee privacy. The legislation requires the disclosure of employees' home addresses, work locations, shifts, job classifications, and, if available, cellphone and landline numbers, along with work and personal e-mail addresses.
  • The revocation of attorney-client privilege. The legislation would discourage employers from seeking legal advice by requiring employers and their advisors to file public reports with the Department of Labor to disclose any arrangement that indirectly persuades employees about union organizing or collective bargaining.
  • A condensing of the union election time frame. The PRO Act would require employers to provide the "Excelsior list"—the election eligibility list—within two days of when a union petition has been filed, which is not enough time for employers to gather that information.

Ranking Member Virginia Foxx, R-N.C., said that the provision violating employee privacy was "outrageous and unacceptable" during House debates over proposed PRO Act amendments. The House did not pass an amendment she proposed to strike the provision.

Organizing Through Union Authorization Cards

Under current law, unions must collect union authorization cards signed by 30 percent of the workers in the proposed bargaining unit to gain a right to a secret-ballot election, noted Randel Johnson, an attorney with Seyfarth in Washington, D.C.

The employer may choose to recognize the union without an election if there is "card check"—a majority of signatures. Union organizers present the cards to workers for their signatures.

"Multiple testimonies by workers themselves on Capitol Hill have demonstrated that they have often felt coerced into signing these cards while doing so without any input on the part of employers as to the possible reasons not to vote for union representation," he said.

Under the PRO Act, if a union loses a secret-ballot election, it could file an unfair labor practice charge challenging the results. If the employer couldn't prove the alleged unfair labor practice did not affect the election results and there is card check, the union would be automatically certified to represent the workers, even though the union lost the election.

Johnson said, "This is a thinly veiled, not-so-clever return to the rejected Employee Free Choice Act," which would have replaced secret-ballot elections with card check.

[SHRM members-only toolkit: Preparing for the Possibility of Union Organizing]

Independent-Contractor Classifications Impeded

The bill wouldn't expressly change the definition of an independent contractor, but it would affect independent contractors by broadly redefining who is an "employee." It would "sweep legitimate independent-contractor arrangements, from a truck driver with his or her own rig to app-based, self-employed drivers, into the 'employee' box," Johnson said. "This new definition is adopted from the widely criticized ABC test from California AB 5."

The Trump administration's position on AB 5 is that it "is actively threatening the existence of both the franchise business sector and the gig economy in California. It would be a serious mistake for Congress to impose this flawed, job-killing policy on the entire country."

Others see the measure as protecting workers from being mistreated by employers. Rep. Bobby Scott, D-Va., chairman of the House Committee on Education and Labor, introduced the legislation with four other representatives by saying, "The PRO Act is a comprehensive proposal to ensure that workers have the right to stand together and negotiate for higher wages, better benefits and safer working conditions."

Rep. Frederica Wilson, D-Fla., chairwoman of the House Health, Employment, Labor and Pensions Subcommittee, was also a co-sponsor of the legislation and said upon its introduction, "The PRO Act will go a long way toward amending and strengthening the National Labor Relations Act and empowering our nation's dedicated workforce." She added, "This legislation will help ensure that workers have strong bargaining rights and are able to defend themselves against unscrupulous employers."

Broad Definition of 'Joint Employer' Revived

The PRO Act also would revive the Browning-Ferris definition of a joint employer. In the 2015 case, the National Labor Relations Board expanded the definition of joint employment to include when an entity has the authority, even indirectly, to control the terms of employment.

"Under this standard, it is impossible for one employer to predict when it could be held liable for the actions of another employer on workforce issues," Johnson said. He predicted that franchisers would distance themselves from franchisees if this definition were revived.

Franchisers would offer less training, payroll assistance and sexual-harassment prevention, all to prevent a finding of increased liability, he said. Or they would refrain from creating new franchisees.

Other Significant Provisions

Todd Lyon, an attorney with Fisher Phillips in Portland, Ore., and Seattle, noted that the bill would propose several other significant changes, including:

  • Banning class-action waivers in arbitration agreements, legislatively reversing the Supreme Court's decision in Epic Systems Corp. v. Lewis.
  • Requiring mandatory collective bargaining agreements when the parties fail to reach an agreement. "This would take away employee voices by preventing them from voting on whether they approve of the collective bargaining agreement," Lyon said.
  • Adopting penalties as high as $100,000 for violations of the National Labor Rights Act.

The bill also would provide a new civil private right of action, including punitive and compensatory damages and liquidated damages, which would necessitate jury trials, Johnson said. "This is a massive expansion of liability, on top of the new $100,000 civil penalties and personal liability in the bill."

An amendment to add a whistleblowing provision to the legislation passed, as did an amendment requiring union elections be scheduled as soon as possible.

Moreover, state right-to-work laws would be weakened by permitting unions to require dues for collective bargaining costs, Johnson added.

Michael Lotito, an attorney with Littler in San Francisco, said that "if the White House and Senate flip to Democrats, the most-progressive and radical changes to our labor laws in history are right around the corner."

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